IDAPA 35.01.01.600 — ENTITIES INCLUDED IN A COMBINED REPORT (RULE 600)

Section 63-3027(22), Idaho Code
01.
Combined Report. Each corporation that is a member of a unitary business transacting business
within and without Idaho is to allocate and apportion its income to Idaho using a combined report pursuant to Rules
360 through 369 of these rules. See Rules 340 through 344 of these rules for the principles for determining the
existence of a unitary business.
(4-6-23)
02.
Domestic International Sales Corporations. If an affiliated group subject to the income tax
jurisdiction of Idaho owns more than fifty percent (50%) of the voting power of the stock of a corporation classified
as a Domestic International Sales Corporation (DISC) pursuant to the provisions of Section 992, Internal Revenue
Code, a combined filing with the DISC is required.
(4-6-23)
03.
Foreign Sales Corporations. If an affiliated group subject to the income tax jurisdiction of Idaho
owns more than fifty percent (50%) of the voting power of the stock of a corporation classified as a Foreign Sales
Corporation (FSC) pursuant to the provisions of Section 922, Internal Revenue Code, a combined filing with the FSC
IDAHO ADMINISTRATIVE CODE
IDAPA 35.01.01
Idaho State Tax Commission
Income Tax Administrative Rules
Section 605
Page 91
is required.
(4-6-23)
04.
Intercompany Transactions. If a return is filed on a combined basis, the intercompany
transactions are to be eliminated to the extent necessary to properly reflect combined income and to properly compute
the apportionment factor.
(4-6-23)
a.
Dividends received from a real estate investment trust or a regulated investment company and not
included in the pre-apportionment tax base as a result of the federal deduction for dividends paid allowed to the
dividend payor are not eliminated as intercompany transactions in computing combined income.
(4-6-23)
b.
Internal Revenue Code Section 1248 Dividends.
(4-6-23)
i.
Taxpayers Using the Worldwide Filing Method. A corporation included in a worldwide combined
group is to treat Section 1248 dividends as dividends for Idaho income tax purposes. An intercompany dividend
elimination is allowed to the extent dividends received are paid from current or prior year earnings previously
included in income subject to apportionment.
(4-6-23)
ii.
Taxpayers Using the Water's Edge Filing Method. A corporation included in a water's edge
combined group is to treat Section 1248 dividends as dividends that qualify for the dividend exclusion allowed by
Section 63-3027C(c)(1), Idaho Code.
(4-6-23)
c.
Dividends received from a stock insurance subsidiary and deducted by a mutual insurance holding
company or an intermediate holding company pursuant to Section 41-3821, Idaho Code, are not eliminated as
intercompany transactions in computing combined income.
(4-6-23)
05.
Insurance Companies. Pursuant to Section 41-405, Idaho Code, payment of an Idaho tax upon an
insurance company's premiums will be in lieu of an income tax.
(4-6-23)
a.
If an insurance company is a member of a unitary business and pays the Idaho premium tax, the
insurance company is to be included in the combined group and its income and factor attributes included in the
combined report. The income tax attributable to the insurance company is to be deducted from the total tax computed
in the combined report. Income tax credits that the insurance company may have earned may not be shared with other
members of the unitary group.
(4-6-23)
b.
If an insurance company is a member of a unitary business and pays a premium tax to a state other
than Idaho, or does not pay a premium tax to any state, the insurance company is to be included in the combined
group and its income and factor attributes included in the combined report. The insurance company is liable for the
Idaho income tax computed on its activity in Idaho and is not exempt from the income tax as a result of Section 41-
405, Idaho Code.
(4-6-23)